Bad week in social media gets worse; Twitter stock hammered

Published July 28, 2018
In this file photo, a banner with the logo of Twitter is set on the front of the New York Stock Exchange (NYSE)in New York.—AFP
In this file photo, a banner with the logo of Twitter is set on the front of the New York Stock Exchange (NYSE)in New York.—AFP

NEW YORK: Cracking down on hate, abuse and online trolls is also hur­ting Twitter’s standing with investors.

The company’s stock plunged on Friday morning after it reported a decline in its monthly users and warned that the number could fall further in the coming months. The more than 17 per cent drop in share value at the opening bell comes one day after Facebook lost 19pc of its value its worst trading day since Facebook went public in 2012.

Twitter says it’s putting the long-term stability of its platform above user growth. That leaves investors seemingly unable to value what the biggest companies in the sector, which rely on their potential user reach, are worth.

Twitter had 335 million monthly users in the quarter, below the 339 million Wall Street was expecting, and down slightly from 336 million in the first quarter. That overshadowed a strong monthly user growth of 3pc compared with the previous year.

The company said its monthly user number could continue to fall in the “mid-single-digit millions” in the third quarter.

Long criticised for allowing bad behavior to run rampant on its platform, Twitter has begun to crack down, banning accounts that violate its terms and making others less visible.

Twitter is now attempting to rein in the worst offenders after years as one of the Wild West corners of the internet.

At the same time, it must convince people it’s the go-to platform in social media, even though it is dwarfed right now by Facebook.

Facebook has more than 2.23 billion users while its apps WhatsApp, Instagram and Messenger each have over 1 billion.

Twitter on Friday reiterated its efforts to “to invest in improving the health of the public conversation” on its platform, making the “long-term health” of its service a priority over short-term metrics such as user numbers.

As part of these efforts, Twitter said that as of May, its systems identified and challenged more than 9 million accounts per week that are potentially spam or automated, up from 6.4 million in December 2017. The company has previously disclosed these numbers.

A Washington Post report put the total number of suspended accounts in May and June at 70 million. The Associated Press also found that Twitter suspended 56 million such accounts in the last quarter of 2017.

While Twitter maintains that most of these accounts were dormant and thus not counted in the monthly user figure, the company also warned that its cleanup efforts could affect its counted user base without giving specific numbers.

“We want people to feel safe freely expressing themselves and have launched new tools to address problem behaviors that distort and distract from the public conversation,” CEO Jack Dorsey said in a prepared statement.

Twitter’s second-quarter net income hit $100.1 million, after a loss last year during the same period. It’s the company’s third profit in a row, the third it has ever posted.

Per-share, the San Francisco company’s net income was 13 cents, or 17 cents adjusted, in line with expectations, according to a poll by Zacks Investment Research.

Revenue of $710.5m, up 24pc and edging out expectations of $696m.

Published in Dawn, July 28th, 2018

Follow Dawn Business on Twitter, LinkedIn, Instagram and Facebook for insights on business, finance and tech from Pakistan and across the world.

Opinion

Editorial

Judiciary’s SOS
Updated 28 Mar, 2024

Judiciary’s SOS

The ball is now in CJP Isa’s court, and he will feel pressure to take action.
Data protection
28 Mar, 2024

Data protection

WHAT do we want? Data protection laws. When do we want them? Immediately. Without delay, if we are to prevent ...
Selling humans
28 Mar, 2024

Selling humans

HUMAN traders feed off economic distress; they peddle promises of a better life to the impoverished who, mired in...
New terror wave
Updated 27 Mar, 2024

New terror wave

The time has come for decisive government action against militancy.
Development costs
27 Mar, 2024

Development costs

A HEFTY escalation of 30pc in the cost of ongoing federal development schemes is one of the many decisions where the...
Aitchison controversy
Updated 27 Mar, 2024

Aitchison controversy

It is hoped that higher authorities realise that politics and nepotism have no place in schools.